Tentative Board Decisions

Tentative Board decisions are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions are included in an Exposure Draft for formal comment only after a formal written ballot. Decisions in an Exposure Draft may be (and often are) changed in redeliberations based on information provided to the Board in comment letters, at public roundtable discussions, and through other communication channels. Decisions become final only after a formal written ballot to issue an Accounting Standards Update.

The amortization of goodwill over 10 years or less than 10 years if an entity demonstrates that another useful life is more appropriate. Goodwill would be tested for impairment upon the occurrence of a triggering event. An entity would make an accounting policy election to test goodwill for impairment at the entity level or at the reporting unit level. The amount of impairment would be the difference in the carrying value of the entity and its fair value (or the carrying value of the reporting unit and its fair value). This alternative is consistent with the alternative for private companies proposed by the Private Company Council and endorsed by the Board.

The amortization of goodwill with impairment tests over its useful life is not to exceed a maximum number of years

The direct writeoff of goodwill

A simplified impairment test.

No decisions were made at the meeting. The Board directed the staff to perform additional research and outreach with public business entity stakeholders about the alternatives, including (1) direct writeoff with disclosures about acquisitions and (2) a simplified impairment test. After the Board makes a decision for public business entities, it will decide whether not-for-profit entities should be permitted to use the alternative that exists for private companies.